Tuesday, June 11, 2013

How to Profit from Green Starvation

Engage Mid Hudson has released its ICLEI-based environmental plan while President Obama continues to push for environmental regulation. Although America can become energy self-sufficient and cut greenhouse gases through exploitation of its massive natural gas reserves, the environmentalist movement, the Democratic Party, and the New York Times push for regulation and government-sponsored alternative energy schemes that fail at public expense. It is unclear whether they will be successful at inhibiting natural gas exploration because the public cost of reducing energy output will be enormous, and the American public may react at the ballot box as their living standard falls. This is not necessarily true, though, because the public has been made ignorant and foolish by the education system and the media. Americans are now so dumbed down that they might accept a 50% reduction in their standard of living because of an implanted fear of windstorms. America got through the Great Depression and the dust bowl, but we must impoverish ourselves because of Hurricane Sandy, according to environmental extremists and the American media.

The situation is worse , though, because environmentalist regulation will lead to mass starvation in the third world. The left invented the use of junk science to justify destructive economic policies that lead to mass murder, so the mass starvation that may result from today's green movement is part of a great, bloody tradition.

The Times's complicity with the Stalinist mass starvation in Ukraine through the propaganda and lies of Pulitzer prize-winning reporter Walter Duranty is well documented. (Duranty won his Pulitzer at the Times based on falsified reporting that implicitly denied mass starvation.) During the 1930s Gunnar Myrdal, Swedish, Nobel prize-winning socialist economist, was a leading supporter of Nazism and Hitler. During the post-World War II era, American universities often apologized for the socialist mass murders occurring in the Soviet Union and in China. In the 1960s American academics like psychologist David McClelland claimed that the Soviet Union's industrial development was so rapid that it would overtake the United States by 1999--ten years after the real-world Soviet collapse. McClelland used a "scientific" regression model to prove his point, and who could argue with science?

In 1972, at a time when the Chinese regime had murdered over 25 million people, the Times ran John Kenneth Galbraith's article about his and fellow economists Wassily Leontieff and James Tobin's trip to China. Galbraith praised the Chinese system, which by then had committed worse abuses than Hitler had. Galbraith did not mention mass murder once; mass killing of Chinese dissenters was a matter of indifference to him and the Times. Subsequently, left-wing linguist Noam Chomsky denied the existence of mass murder in Cambodia, claiming that the commonly accepted numbers of victims of Pol Pot's genocide had been overstated. Just as the Nazis deny that the holocaust occurred, so did Chomsky argue that there was a less serious mass murder in Cambodia than people thought.

Environmentalism is the latest junk science to pique the left's genocidal lust.

What do green policies have to do with mass starvation? The green development scenario aims to reduce carbon energy use, but agricultural productivity depends on carbon energy. Therefore, a reduction in carbon energy will reduce agricultural efficiency and increase hunger. This has the most extreme effect in poor countries. This is a classic level curve tradeoff taught in elementary economics classes. Repeated proposals based on UN Agenda 21 to reduce carbon emissions by 30% in places like Great Britain are only the beginning.

In agriculture the less energy used the more land used. Yet the amount of land used has been reduced significantly in recent years because of Federal Reserve, European Bank, and other central banks' monetary policies, which led to the real estate bubble. Scarcity of agricultural land is most extreme in the third world, where food represents a significant share of the peoples' budget. Green restrictions on carbon energy production will affect third world agriculture. The green movement is very much in the left-wing tradition: its policies will come to the same end as the Times's did in 1930s Ukraine.

College professors, who are on the forefront of green advocacy, will not starve. Indeed, we intend to profit. This morning I thought of three strategies to profit from green starvation. I am not selling my investments in natural gas and energy infrastructure, but I view the following investments as a partial hedge. They will do well in any case.

1. Agricultural real estate. There are few real estate investment trusts that specialize in agricultural land. The only one I could find is Gladstone Land Corporation (NASDAQ: LAND). It yields a 9% dividend. It is falling today along with other high-yield securities. It is a new REIT with a small capitalization; therefore, it is risky.

2. Potash Corp. Fertilizer will be in demand as land becomes more important to agriculture. Potash, one of the most important fertilizers, is a scarce commodity (NYSE: POT). Potash is a Canadian firm, but it trades on the NYSE as well as on the TSX. Its dividend is over 3%, and its risk (beta) is higher than the market average.

3. Canadian or Australian real estate. I'm holding off on actually buying a home in one of these places, but they have the highest farmland per capita among all the nations. It might be nice to know that you can live near an ample food supply.

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Mitchell Langbert

About Me

I have researched and written about employee benefit issues and in my previous life was a corporate benefits administrator. I am currently associate professor of business at Brooklyn College. I hold a Ph.D. from the Columbia University Graduate School of Business, an MBA from UCLA and an AB from Sarah Lawrence College. I am working on a project involving public policy. I blog on academic and political topics.